Freelancers and contractors have the option of working on assignments that they find most enjoyable. However, their income is subject to change and fluctuation. A sound financial strategy is imperative for low-income or a who lack revenue.
When freelancing, the freedom offered by the structure is paramount, whether it's creative or the ability to dictate the terms and duration of the work. Despite the benefits, freelancers may sometimes have to seek extra energy to push harder because income is irregular and uncertain, and there are no additional benefits like paid time off or medical insurance.
A freelancer can lose a project within two weeks of notice, which would significantly impact his or her income in a day.
Regarding money, prioritizing financial well-being should be the top priority. Freelancers must devote time to their finances to maintain a healthy financial status. Unplanned payments were familiar when they started, so they had to be selective about their assignments.
Being creative is part of the freedom that most freelancers enjoy, but it also entails being strict with money – you need to spend less and save more. During the initial years, without sufficient savings, some may even have to accept a temporary lowering of lifestyle expenses.
Having a cushion of a working partner or credit from your parents may be more practical. However, avoid extravagant decisions because of the initial simplicity of capital.
Freelancers must first 'front-load' their savings, which is quite difficult. During the initial stages, income will only be sufficient to support oneself. The purpose should instill a need to save, regardless of the amount, or at least to save regularly.
For self-employed individuals, until their professional journey has reached a point where their income from regular jobs is significant and their services are considered a sought-after brand, avoid adding to financial burden through high-cost loans.
Additionally, take your time purchasing large assets like a new residence. That can be postponed until you have enough money.
However, stocks are highly volatile in the short term. For individuals who work independently, without a regular income and financial security derived from employment with an organization, relying on market-linked investments too heavily can negatively affect their finances when the capital markets are down.
It's not just investing that is important, but the overall awareness of risk is crucial.
